BTO – wrap up day 1

Day 1 of Buy Tourism Online here at Florence was a success. Many delegates, and above all interesting discussions on tourism 2.0

What was missing or perhaps avoided at the round table discussions was a more in depth analysis of intermediation (as there were many portals which do just that !)

The general argument regarding disintermediation was that intermediation exists and will always exist in one shape or form or another: There will always be someone there to modulate transactions between the hotels and the end user, Google was elevated to the rank of an intermediator. So is my blood an intermediator between life and death.

The web has transformed our ways of working and when a product or service is kissed by the digital transformation it changes forever: the web will expel unnecessary intermediation: where the end user can go himself without a go between he will, and this has shortened the supply chain.

If there is no added value to an intermediate process then it is useless and should be eliminated.

Many portals aggregate (or should I say concentrate) small entities and crush them with their overpowering online presence and by doing so impose their intermediation – I won’t use any names but if you are in the travel & recreation business you know who I am talking about …

In a world where a hotel room has become a commodity (unless you create a something like this) it is dishonest to ask for 25% commissions simply because you are the go between, especially in a sector (hotels) where margins have been falling 4 consecutive years.

So where is the added value brought by these portals which are intermediating ? It’s not there – there funneling business to hotels who need the business, and find themselves underselling rooms which puts them even more in a hole: many are better off not selling at all.

This is exactly what happened to the PC market years ago when the prices took a nose plunge and margins went down to single digit percentages.

When prices of PCs fell so did the margins – this is not happening for hotels and channel distribution all resisting the call of hoteliers to reduce their commissions.

This is what my experience tells me about intermediation and disintermediation – this is what hoteliers are saying – but I don’t hear anyone responding adequately to this cry.